The TransUnion Vehicle Pricing Index (VPI) has found that used passenger vehicle price inflation dipped into negative territory for the first time in three years in the last quarter of 2012.
The country experienced five consecutive deflationary quarters in the 2008 and 2009 timeframe.
Issued quarterly, the VPI is calculated from data received by vehicle risk intelligence company TransUnion on vehicle financing registrations from all of the major banks and vehicle finance houses. The VPI also uses monthly sales returns from thousands of dealers throughout the country.
Overall used car price inflation for the year came in at 2.2 percent, more than one percentage point down from the previous 12-month period.
In contrast, year-on-year new vehicle inflation remained relatively steady at 2.2 percent for the year — marginally down from the 2.72 percent reported at the end of 2011.
However, TransUnion Auto Senior Vice President Mike von Höne said that several manufacturers had already introduced, or would be introducing, annual price increases on new vehicles this month.
"Should the Rand remain weak, there could be further inflationary pressure on new vehicle prices as the year progresses," he said.
Von Höne attributed the continued pressure on the used market to ongoing new vehicle discounts and assistance programmes. This was particularly evident in the one- to three-year-old segments, as these models compete more directly with new and demo models.
"This trend is expected to continue for the foreseeable future as both dealers and manufacturers compete to ensure that the new products are attractive to consumers," added von Höne.
Despite the pressure on the used market, the ratio of new to used vehicles financed remained relatively stable at 1.75 used cars for every new car financed in 2012.
The new vehicle market ended 2012 strongly as total growth for the year was 9.2 percent — 4.6 percent for the light commercial sector and 11.3 percent for passenger cars.
"The 2012 growth rates were very good considering they grew off a solid base in 2011, which in itself had been some 20 percent up on the 2010 year," said von Höne.
"There is widespread consensus in the industry that achieving double-digit growth in the passenger market in 2013 will be a tough task particularly when one considers the strong 2012 base effect on continued high fuel prices and the seemingly inevitable introduction of tolls on Gauteng's highways."